June 12 U.S. Secretary of State Hillary Clinton
has voiced deep concern over sectarian violence in Myanmar,
unrest that threatens to endanger democratic and economic
reforms in the country after decades of military-ruled
isolation.

Clinton and the European Union, which both recently
suspended economic sanctions against Myanmar to recognise and
encourage its transition to democracy, have appealed to the
nation's rulers to calm the situation and bring reconciliation.

Tensions between Buddhists and Muslim Rohingyas, a stateless
people, turned violent in Myanmar's northwest over the past
week, after the gang rape and murder of a Buddhist woman, widely
blamed on Muslims, sparked bloody reprisals.

"The situation in Rakhine state underscores the critical
need for mutual respect among all ethnic and religious groups
and for serious efforts to achieve national reconciliation in
Burma," Clinton said in a statement on Monday.

"We urge the people of Burma to work together toward a
peaceful, prosperous, and democratic country that respects the
rights of all its diverse peoples."

At the weekend, mobs of Muslims and Buddhists torched houses
in Sittwe, the biggest town in Myanmar's western Rakhine State.
Hundreds of Rohingyas boarded boats to try to flee into
neighbouring Bangladesh but many were turned back.

It is the worst communal violence since a reformist
government replaced a junta last year, began to allow political
pluralism and vowed to tackle ethnic divisions.

The European Union said on Monday it was satisfied with the
"measured" handling of the violence so far by Myanmar President
Thein Sein, who has said the unrest could jeopardise the
transition to democracy if allowed to spiral out of control.

"We believe that the security forces are handling this
difficult intercommunal violence in an appropriate way," said
Maja Kocijanic, spokeswoman for EU foreign policy chief
Catherine Ashton. "We welcome the priority which the Myanmar
government is giving to dealing with all ethnic conflicts."

RIGHTS GROUP CRITICISES GOVT

However, U.S.-based Human Rights Watch criticised Thein
Sein's handling of the violence, saying he had effectively ceded
control of the situation to the army and that troops had opened
fire on Rohingyas since the unrest erupted in Rakhine State,
also known by its former name Arakan.

"Deadly violence in Arakan State is spiralling out of
control under the government's watch," Elaine Pearson, deputy
Asia director at Human Rights Watch, said in a statement on
Tuesday.

The group urged the government to allow international
journalists, aid workers and diplomats into the area.

"Opening the area to independent international observers
would put all sides on notice that they were being closely
watched," Pearson added.

EU states suspended most sanctions against Myanmar after it
released many political prisoners, allowed opposition leader
Aung San Suu Kyi and her National League for Democracy to
contest by-elections, and lifted some repressive measures.

They had previously frozen the assets of nearly 1,000
companies and institutions, and banned almost 500 people from
entering the bloc.

The United States, which had imposed more stringent and
comprehensive sanctions against Myanmar, has also suspended
curbs on U.S. investment and the provision of financial services
in response to changes in the country.

At least eight people were killed and many wounded,
authorities said, after fighting erupted on Friday in the town
of Maungdaw, and quickly spread to Sittwe and nearby villages.

Sate-run MRTV announced curfews in three towns, including
Thandwe, the gateway to Myanmar's tourist beaches, and
Kyaukphyu, where China is building a port complex. The curfews
underline the risk to Myanmar's attempts to encourage tourism
and foreign investment back into the country.

The United Nations said it had started evacuating staff from
the area.

INVESTMENT NEED

Western firms are keen to help meet Myanmar's vast need for
investment in health, telecommunications, housing, energy and
other infrastructure after decades of isolation.

The country also has large untapped resources of oil and
natural gas and the potential to be a major exporter of rice and
wood. Moreover, Myanmar neighbours the world's two biggest
emerging markets, China and India.

Buddhists and Muslims have long lived in uneasy proximity in
Sittwe, where ethnic Rakhine Buddhists were carrying bamboo
stakes, machetes, slingshots and other makeshift weapons at the
weekend after Muslims were seen setting houses on fire.

Rohingyas live in abject conditions along Myanmar's border
with Bangladesh and are despised by many Rakhine, who belong to
the predominantly Buddhist majority.

About 100 Rohingyas tried to flee by boat into Bangladesh
but were pushed back on Monday, Bangladesh's border guard said.

Five boats carrying about 200 Rohingyas were pushed back out
to sea on Sunday, said Anwar Hossain, a major with the guard.

Rohingya activists have long demanded recognition in Myanmar
as an indigenous ethnic group with full citizenship by
birthright, claiming a centuries-old lineage in Rakhine State,
where they number some 800,000.

But the government regards them as illegal immigrants from
Bangladesh and denies them citizenship. Bangladesh has refused
to grant Rohingyas refugee status since 1992.

The authorities have blamed Rohingya mobs for the violence.
But Rohingya activists and residents accuse ethnic Rakhine of
terrorising their communities.

State media said three men had gone on trial on Friday for
the rape and murder.
(Reporting by Reuters in Sittwe, Nurul Islam in Bangladesh and
Sebastian Moffett in Brussels. Writing by Andrew R.C. Marshall
and Sebastian Moffett.; Editing by Jason Szep and Mark Bendeich)

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